TDS - lower deduction or non-deduction certificate – CBDT Instructions

By Vijay Kumar

BOARD had earlier instructed that certificates for lower deduction or nil deduction of TDS u/s 197 are not to be issued indiscriminately and for issue of each certificate, approval of the JCI/Addl. CIT concerned need to be taken by the Assessing Officer (AO). It was also instructed that power of issue of certificates under Section 197 would ordinarily be exercised by the officers manning TDS Administration.

It has been brought to the notice of Board that the AOs are issuing certificates for lower or non-deduction of tax at source under Section 197 indiscriminately, in contravention of relevant Income Tax Rules and Instructions.

Now CBDT directs that in addition to the earlier instructions, prior administrative approval of the Commissioner of Income Tax (TDS) shall be taken (where the cumulative amount of tax foregone by non-deduction/lesser rate of deduction of tax arising out of certificate under Sec. 197 during a financial year for a particular assessee exceeds Rs. 50 lakh in Delhi, Mumbai, chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune Stations and Rs. 10 lakh for other stations. Once the CIT (TDS) gives administrative approval of the above, a copy of it has to be endorsed invariably to the jurisdictional CIT also.

CBDT Instruction No. 7/2009, Dated: December 23, 2009